How To Set The Right Financial Goals In Business

Oct 25, 2021

Every business should have clear, realistic financial goals to work towards. 

Whether you’re a one-person set-up, a rapidly growing team, or a larger organisation, your goals act as your roadmap. 

Financial goals in business help you to navigate the small daily decisions and the more significant direction changes. Ultimately, they ensure you’re on the right track regardless of what happens.

But it’s not just about choosing any old targets and slotting them into your financial plan. The key is to set goals that work with your unique vision and purpose to grow your business the way you want.

Here’s how to set the right financial goals for your business


How To Set The Right Financial Goals In Business


Why Financial Goals In Business Are Important


Can’t you just go with the flow in your business and see where it takes you?

Technically, you can do whatever you like with your business. Going with the flow can be useful if you’re adapting to changing times, pivoting, and reviewing as you go. But to do that effectively, you still need to work within a framework to ensure your business stays afloat.

Your financial goals are that framework. They help you and your team make decisions that align with your purpose, and they guide everyone’s focus to ensure you’re all heading in the same direction.

Your goals help you prioritise what to work on, identify what needs adjusting, and give you a valuable sense of direction.


How To Set the Right Financial Goals For Your Business

There are a few things that you want to focus on to ensure that you are setting the right financial goals in business. They are:


Make sure you’re working with the correct data

Your goals need to be accurate and realistic, which means the financial data you’re working with must also be accurate. You’ll need to refer to a range of accounting reports, such as your cash flow report, profit/loss statement and balance sheet.

Before you start setting goals, make sure your bookkeeping and accounting are up to date. 

If this is a task you struggle to stay on top of, consider automating your financial record keeping with accounting software and/or outsourcing to an experienced bookkeeper.


Set smart business goals

Stick to the tried and tested S.M.A.R.T system when setting financial goals in business. Make sure your targets are specific, measurable, achievable, realistic, and time-bound.

Having the vague goal of “increasing profits” is far less effective than saying, “Increase profits by 2% by the end of the financial year by increasing conversions on our website.”

This gives you a specific timeframe and a plan of action to focus on.


Be clear on your vision, mission, and value proposition

Before you zoom in on your financial goals, make sure you’re clear on these guiding lights for your business. These foundations help you stay true to your customers and values while still growing and evolving.

Once you know what you’re selling and why, you can set targets around setting the right price for it, selling more for it, decreasing your expenses in creating it, and so on.


Forecast your cashflow

You wouldn’t set off in your car for a destination without first making sure you’ve got enough gas to get there, right!

The same goes for your business. Not all your financial goals have to be about making more money. Some can be as simple as changing the way you manage and understand your finances.

Generating a cash flow forecast and updating it regularly is a great way to ensure you’ve got enough “gas in the tank” to get where you need to. And if not, at least you’ll know ahead of time so you can change your plans accordingly.


Schedule the time

Setting the right financial goals in business requires a good chunk of time. Often, the more “urgent” tasks take priority, pushing the longer-term tasks to the bottom of the list. 

If you find it difficult to get around to this kind of planning, make sure you schedule it in your calendar and commit to getting it done. Do the same thing when it comes to regularly reviewing your goals. 

Business strategy should be a top priority, so if you struggle to find space in your calendar, it may be time to outsource some of your other tasks to make room to work on the bigger picture.

If you need help with bookkeeping or administration tasks, than Admin Army are the team to do it! We wage war on the tasks you don’t have time for, allowing you to focus on the sales generating tasks in your business. 

Get in touch today to find out how we can help you achieve your financial goals!


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